Sony terminates $10 billion merger with Zee Entertainment
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Sony Corporation has issued a notice terminating the definitive agreements with Zee Entertainment Enterprises Ltd (ZEEL) for the proposed $10 billion merger, citing delays and conflicting views on leadership.
The merger, initially announced on December 22, 2021, faced challenges, including disagreements over the combined entity's leadership, specifically involving Zee’s MD & CEO Punit Goenka.
Sony, now known as Culver Max Entertainment Ltd (CME), is also seeking $90 million in termination fees from Zee, reported The Mint.
"Although we engaged in good faith discussions to extend the end date under the merger cooperation agreement, we were unable to agree upon an extension by the January 21 deadline. After more than two years of negotiations, we are extremely disappointed that closing conditions to the merger were not satisfied by the end date," stated Sony in a notification to the Tokyo Stock Exchange.
"We remain committed to growing our presence in this vibrant and fast-growing market and delivering world-class entertainment to Indian audiences," it added.
The termination comes after Zee sought a deadline extension, which expired on January 20. The expected completion date was December 21, 2023, with a 30-day grace period for potential extensions included in the merger pact.
"The merger did not close by the end date as, among other things, the closing conditions to the merger were not satisfied by then. SPNI has been engaged in discussions in good faith to extend the end date, but the discussion period has expired without an agreement upon an extension of the end date," it added.
Sony expressed discomfort with the regulatory overhang related to Punit Goenka's regulatory ban, and the company has been advocating for its India MD & CEO NP Singh for the top leadership position. Goenka had received a reprieve from the Securities Appellate Tribunal (SAT) overturning a ban by the market watchdog Securities and Exchange Board of India (Sebi).
While the termination impacts the envisioned deal, both companies have signaled a commitment to move forward. Punit Goenka, commenting on the situation, expressed determination to strengthen Zee as Bharat’s pioneering Media & Entertainment Company.